Case Law

The cook breached her duties in an especially gross manner by taking the leftovers from lunch - 21 Cdo 1496/2013

The employer immediately terminated the employment relationship of her employee, a cook, for a breach of her duties in an especially gross manner. The employee committed the breach by taking away some food which belonged to the employer in her bag when leaving work. The employee defended her conduct stating that the food was to be destroyed, as well as the fact that no damage actually occurred to the employer. Thus, she claimed the invalidity of the immediate termination at the court.

The court of first instance rejected the suit based on the fact that the employee breached her elementary duty, i.e. a duty to properly manage the resources entrusted to her by the employer and to guard and protect the property of the employer against damage, loss, destruction and abuse. The court of appeal, however, had the opposite opinion and approved the suit in full extent referring to the fact that the employee was employed at the employer for a very long time, as well as the fact that the food was to be thrown away, thus no damage was caused to the employer.

Yet, the Supreme Court confirmed the decision made by the court of first instance and repealed the decision of the appeal court. It based its judgement primarily on the fact that the employee had not only committed a direct assault on the property of the employer, but also had violated the loyalty to the employer, which is sufficient for an immediate termination of the employment relationship.

Such a decision is particularly important in terms of reviewing the intensity of breach of the employee’s duties. It refers to the fact that the employer is entitled to immediately terminate the employment relationship of the employee even though the employee has not caused any real harm to the employer. In this regard, in the opinion of the judges of the Supreme Court, it is sufficient when the employee is disloyal to the employer. Such conduct namely breaches the mutual trust in the employment relationship.

Date: Monday, March 3, 2014
Requirements of medical statement as grounds for dismissal – 21 Cdo 224/2013

The plaintiff received a notice of termination for a long-term loss of health fitness to perform work (according to Sec. 52 (e) of the Labour Code) on the grounds of a valid medical statement containing all of the prescribed requirements. However, subsequently, the plaintiff confronted the notice at court, since he was convinced that the reason of the loss of health fitness to perform work was an occupational disease and, therefore, his employment relationship should had been terminated according to Sec. 52 (d) of the Labour Code. In this case, he would be thereupon entitled to a severance pay.

Although the court of the first instance denied the suit, the appeal court approved it, stating that besides the requirements as stated by legal regulations, a medical statement should also contain an explicit reason for the long-term loss of health fitness to perform work – i. e. whether the reason is a job-related injury, an occupational disease/exposure to this disease or another general reason. In the opposite case, it is not possible to consider such medical statement as qualified grounds for dismissal. This opinion was also approved by the Supreme Court.

Based on the above mentioned, we suggest to the employers to provide their doctors (their providers of the employment-related medical services) with information about all of the requirements which should be included in the medical statements – and, moreover, in case of a long-term loss of health fitness, also to inform them about the necessity to provide its reason. In the opposite case, the employer would namely risk that in an eventual suit, the dismissal would be declared invalid.

Date: Thursday, February 13, 2014
Special nature of the work performed by an employee – 21 Cdo 1611/2012

The employer repeatedly concluded with the plaintiff fixed term employment contracts. It had an agreement with trade unions, according to which, the plaintiff’s job had a special nature (because of the nature of its funding). The plaintiff claimed that there had been a change in the duration of his employment contract to an indefinite period because the special nature of his work had been defined too broadly. The Supreme Court stated, that legislation does not provide terms for the content of agreement on defining circumstances related to special nature of the work. Those may be involved both directly in specific activities, either in outer circumstances determining conditions under which the conclusion of employment contract and performance of work comes into consideration. These include the possibility of funding. Thus, the definition of special nature of the work has been made in accordance with legislation.

The area of circumstances related to the special nature of the work can be very broad and can include funding of the operation. However, we recommend proceeding with caution when defining those circumstances – court rulings can evolve especially regarding the new Civil Code.

Date: Tuesday, November 5, 2013
Interpretation of the term "work of some other type" - 21 Cdo 1573/2012

In this case, the plaintiff worked in the employment relationship with the employer as a driver in the distribution of goods and, further, based on a contract of subsidiary work performance, he collected money for the delivered goods from the customers. The plaintiff demanded a nullity of the contract of subsidiary work performance, since the performance of work in his employment relationship blended together with the work performed according to the contract of subsidiary work performance. In this regard, the plaintiff considered, that, by the contract, the defendant was covering the overtime work, for which he was paying remuneration in the form of a share in sales, not remuneration for the time worked. Both the courts of lower instance and the Supreme Court of the Czech Republic agreed with him. The Regional Court derived that the contract of subsidiary work performance concluded between the parties was null since it evades the law , and also for the reason that the contract of subsidiary work performance cannot be concluded for the works which are part of the workload covered by the employment contract.

This decision was also confirmed by the Supreme Court, which defined what criteria must be met in order to constitute the work of some other type. Particular activities must be of a different nature, not only supplying the existing workload; they cannot be directly related to the work activities according to the employment contract, they cannot be conditioned by the performance of the main work and they cannot be performed in the time of performance of another employment relationship. If these conditions are met, the employer may conclude with the employee, in addition to the employment contract, an agreement to perform work, under the condition that the employee will perform work to the extent not exceeding half of the average weekly working time.

The employers should consider wisely all the circumstances of concluding another employment relationship with an employee, so they do not evade the law. In this regard, evading the law may get significantly expensive for the employer – namely, not only in the litigation, but primarily in paying out the overtime work.

Date: Tuesday, June 11, 2013
Transfer of Rights and Obligations – 21 Cdo 268/2012

The administrator in bankruptcy immediately terminated the employment of an employee of a hotel and afterwards sold the hotel. The employee notified the administrator in bankruptcy that he insisted on being further employed and brought a suit to determine invalidity of the immediate termination, with which he succeeded. However, the employee filed his notification and the suit after the hotel was sold. In this particular case the employee claimed both the administrator in bankruptcy and the new owner of the hotel should pay him the salary compensation. The lower courts complied with the employee’s request. However, the Supreme Court didn’t. The notification and the suit were filed after the hotel was sold, i.e. also after the transfer of undertakings. Therefore, according to the Supreme Court it should have been brought against the new owner of the hotel. The court’s decision issued against the administrator in bankruptcy has no effect on the new owner of the hotel. The immediate termination is therefore valid for the new owner of the hotel. Therefore it does not have to pay the salary compensation to the employee. However, according to the Supreme Court, the same is true for the administrator in bankruptcy. A claim for the salary compensation does not arise due to the invalidity of the employment termination, but because the employer does not assign the work to the employee. The administrator in bankruptcy however didn’t have the duty to assign work to the employee because of the transfer of undertakings. However, the employee according to the Supreme Court could claim damages from the administrator in bankruptcy and the new owner of the hotel if they had failed to fulfil their information duty in connection with the transfer of undertakings.

This decision is important mainly to employees who intend to challenge the termination of their employment. If the transfer of undertakings occurs before filing a suit or during the litigation it is necessary that the court declares the invalidity of the employment termination to both of the employers, not only to the former employer.

Date: Tuesday, March 26, 2013
Conditions for employee representatives – 21 Cdo 974/2012

In this case, the trade union presented a request, asking the employer to secure, at his own expense, amply equipped spaces for the trade union’s activities. However, the trade union only had six members and only two of them were employees of the employer. Moreover, both of them claimed in court the invalidity of given notices of termination and they founded the trade union with the primary aim to “settle the accounts” with their employer. The dispute came up to the Supreme Court of the Czech Republic after the claim was rejected by the court of appeals which denoted the demands of the trade union as in contradiction with good manners. The same opinion was reached by the Supreme Court of the Czech Republic which rejected the extraordinary appeal of the trade union. The Supreme Court of the Czech Republic justified its decision primarily on the fact that the Labour Code leaves it up to the court to decide which conditions must be considered towards each trade union as adequate for its activity in each particular case. A basic factor for this consideration is the operational possibility of the employer. However, the court can also take other facts into account, such as the real needs of the particular trade union or the real purpose of its establishment. Moreover, the Supreme Court of the Czech Republic stated that only trade unions which show active and from outside recognizable activity is allowed to use authorization given by labour law regulations.

The employer is therefore entitled to consider, while creating conditions for activities of each trade union, which conditions are adequate to the operational reasons of the employer, the number of members of the trade union or to the character of the trade union’s activities (i.e. if it truly protects employee’s interests). Therefore, newly established trade unions do not have to automatically receive the same conditions from the employer as the one that is settled down and properly working.

Date: Monday, January 28, 2013
Change of instrumentation – 21 Cdo 444/2012

In this case the employer made a decision on a change of technical equipment which resulted in cessation of using a particular type of device. In connection with this change, the employer cancelled two working positions. One of them was plaintiff’s, who was given notice of termination for redundancy due to organizational reasons. However, the plaintiff claimed invalidity of this notice of termination because she was working with the device the Employer stopped using only exceptionally, so the change of technical equipment cannot, according to the plaintiff, have lead to her redundancy. Most of the time, she was working with another device, which is still used by her employer. Although the employer originally planned to restrict operation of this device too, it never actually happened. Conversely, as it was shown during the proceedings, its usage even increased. The dispute came to the Supreme Court of the Czech Republic which stated that Section 52(c) of the Labour Code distinguishes between different types of employer’s decisions which result in redundancy of employees. These decisions are (i) the decision on the change of tasks of the employer, (ii) the decision on the change of technical equipment, (iii) the decision on the reduction of the personel for the purpose of increasing work effectiveness and (iv) the decision on other organisational changes.

According to the Supreme Court of the Czech Republic, the decision of the Court of Appeal that the conclusion about redundancy of employee must be based only on the type of work which is stated in employee’s employment contract, and not on the particular type of work performed by employee, cannot stand in this case, because the employer terminated the employment relationship of the plaintiff due to redundancy caused by decision on the change of technical equipment. The Supreme Court of the Czech Republic reached just the opposite conclusion, i.e. that actual work performed by the employee is determining for deciding if the employee became redundant for the employer on the basis of decision on change of technical equipment. The notice of termination was in this case truly invalid and the employer should in this case have decided on the reduction of number of its employees (this would allow to choose redundant employees only on the basis of the type of agreed work).

In the light of this ruling, employers should, while planning and executing organisational changes, first decide what is the purpose they want to reach by this change and accordingly choose the type of decision which in accordance with Section 52(c) of the Labour Code fits best to their needs. The type of decision adopted by the employer influences the scope of employees which may be dismissed as a result of it. E.g. in the case of decision on the change of technical equipment, only employees who actually worked with discarded device may be dismissed.

Date: Thursday, January 24, 2013
Pretending of work - 21 Cdo 2596/2011

In this case, an employee came to work and marked his arrival in the employer’s attendance system. Subsequently, however, the employee left the workplace and returned only in the evening to mark that he was leaving. The employer consequently delivered the employee immediate termination of employment, the validity of which was the matter of a lawsuit which went all the way to the Supreme Court of the Czech Republic. According to existing judicature, it was possible to consider an unexcused absence as a breach of work duties in an especially gross manner only once it lasted for several days, the Supreme Court of the Czech Republic, however, did not consider the behaviour of the employee as a “simple” unexcused absence, but as an attack on the employer’s property. By pretending to work, the employee attempted to illegally reduce the employer’s assets because he tried to get salary for work during the period of time, in which he did not actually work. According to the Supreme Court of the Czech Republic, an attack on the employer’s assets constitutes such an important factor, that it ordinarily constitutes breach of employee’s duties in an especially gross manner, and so it justifies immediate termination of employment.

Employers should therefore always consider whether the unexcused absence of their employee is the so-called simple absence, or an absence during which the employee pretends work and so tries to enrich himself at the expense of the employer. The employee may consider even one day of simulated work as a breach of the employee’s duties in an especially gross manner and immediately terminate the employment. With simple absence, the Supreme Court of the Czech Republic requires that immediate termination of employment is used only once this absence lasts for several days.

Date: Wednesday, October 17, 2012
Damages in case of termination of employment by agreement – 21 Cdo 2204/2011

In this case, the employee claimed damages suffered in connection with the termination of his employment. The employment was terminated by an agreement concluded on the initiative of the employee. The reason for this was escalating bullying in the workplace, where the employee was , for example, inappropriately shouted down upon, had his expertise degraded etc. The employer subsequently admitted within another proceeding that the employee was really discriminated on the grounds of his health condition. Courts of first and second instance dismissed the claim for damages. On one hand, they stated that the employer acted unlawfully and the employee suffered damage, but on the other, they did not find the causality between the unlawful acting and the occurrence of damage. The courts reached to such conclusion because it was the employee who suggested the termination of employment. Both courts considered the reasons which led the employee to such a move as irrelevant, the Supreme Court of the Czech Republic, however, did not agree with this conclusion and stated that not only the fact that the employment was terminated by mutual agreement but also the reasons which led the employee to conclude such agreement are important for proper consideration of the causality.

For many employers, this decision should be a signal for them to leave the broadly widespread idea that termination of employment by mutual agreement is a perfectly safe and unchallengeable way of termination of employment, irrespective of the means used to reach such an agreement. If the employee proves that he concluded the agreement as a result of inadequate pressure, discrimination or bullying by the employer, he will be entitled to claim incurred damage.

Date: Tuesday, October 9, 2012
(Un)signed notice of termination - 21 Cdo 2357/2011

In this case, an employee claimed the invalidity of the notice of termination because it was allegedly delivered unsigned. The employee documented this statement by an unsigned version of the notice of termination. The employer, on the other hand, argued that the notice of termination was delivered properly, signed, and the employee misused the unsigned version of the notice of termination which was handed over to the employee sooner, together with a proposal of the agreement on termination of employment, so that the employee could standstill decide whether he would accept the agreement on termination of employment. The employer documented this by several witnesses. The court of first instance declared the notice of termination valid, but the court of appeal changed this decision and declared the notice invalid. The Supreme Court superseded decisions of both instances due to formal reasons. However, in practical terms, this case shows that employers must be careful when providing employees with unsigned versions of documents. The question is how the employers should later prove that they provided employees with the signed original of the notice of termination and what kind of evidence would be accepted by the courts in this respect. A solution could be to require the employee to provide a written declaration that the properly signed notice of termination was delivered to him and that he retained its original. Such a declaration could be on a separate paper or included in the notice of termination itself. Only further trends in judicature will show which facts will be deemed as proved by the courts.

Date: Wednesday, September 26, 2012
Non-competition clause - 21 Cdo 4394/2010

In this case, an employer concluded a non-competition clause with an employee, which expressly allowed the employer to unilaterally terminate the non-competition clause until the end of the employment. The Czech Supreme Court considered whether such an agreement is valid, i.e. whether the employer is entitled to unilaterally terminate the non-competition clause without giving any reason. The Supreme Court came to the conclusion that the employer may unilaterally terminate the non-competition clause until the end of employment only if it was agreed between both parties and only on the grounds of agreed reasons which do not constitute of an abuse of rights at the detriment of the employee. According to this interpretation, the employer cannot unilaterally terminate the non-competition clause for any reason or without giving a reason, even if this possibility was agreed upon with the employee. However, this case was ruled according to the "old" Labour Code (Act No. 65/1965 Coll.). It is not clear whether the Supreme Court would use this interpretation even in the case of the termination of a non-competition clause concluded according to the current, valid Labour Code (Act No. 262/2006 Coll.).

Date: Wednesday, March 28, 2012